California’s $7,500 EV Rebates Return—But Teslas Are Left Out

CALIFORNIA – On November 25, Governor Gavin Newsom said that he would bring back California’s $7,500 Clean Vehicle Rebate Program (CVRP) if the new Trump administration follows through on its threat to get rid of the federal tax credit for electric vehicles (EVs).

Bloomberg News was told by Newsom’s office that the current plan limits market share in a way that would leave out Tesla’s popular electric vehicles. Newsom’s office said that the details, such as whether or not Tesla should get credit, will be worked out with the state lawmakers and could change.

Elon Musk, CEO of Tesla, posted his answer to X, which used to be called Twitter.

“Even though Tesla is the only company that makes electric vehicles in California! “This is crazy,” Musk said.

In the first half of 2024, Tesla sold 104,000 cars to people in California. If they are not included in the rebate scheme, it could hurt sales even more, which are already 13% lower than the same time last year.

Trump wants to get rid of the government EV tax credit.

Reuters reports that President-elect Donald Trump’s transition team wants to get rid of the $7,500 tax credit for buying an electric car as part of larger tax reform legislation.

Musk, who will co-lead Trump’s new Department of Government Efficiency (DOGE), said in July that ending the subsidy would be “devastating” for Tesla’s U.S. EV rivals, such as traditional automakers like General Motors. It might make Tesla’s sales go down a little, but not by much.

Toyota Motor Corp., Volkswagen, and General Motors all asked Trump to keep the tax credits for buying electric cars, saying that unfair competition came from “heavily subsidized electric vehicles and technologies exported from China.”

Tesla has already used up all of the credit it was given under past programs.

In the third quarter of 2024, 115,897 electric vehicles were bought in California.

Newsom’s office said that Californians bought 115,897 ZEVs in the third quarter of 2024. This was 26.4% of all new cars sold in the state.

The news release said, “The proposed California rebates could come from the Greenhouse Gas Reduction Fund, which is funded by polluters through the state’s cap-and-trade program. The changes would encourage innovation and competition in the ZEV market.”

The CVRP paid for more than 594,000 cars over its lifetime.

The governor’s office says that the state will also provide rebates and cash to create an easy-to-use charging network.